Since the 2004 implementation of the Check Clearing for the 21st Century Act (Check 21), the financial services industry has made a significant shift away from a predominantly paper-based environment. Today, over 99 percent of deposits and over 95 percent of presentments at the Federal Reserve Banks are presented via electronic images. Having benefitted from cost reductions and efficiencies gained from electronic check processing, financial institutions expressed interest in a more efficient savings bond redemption process.
In response, the U.S. Department of the Treasury’s Bureau of the Public Debt approved an initiative to transition the processing of redeemed savings bonds from the EZ Clear Program to image-enabled processing. As announced (PDF) on November 14, 2011, the Federal Reserve Banks expect to begin accepting savings bonds in a FedForward® image cash letter (ICL) in the second quarter 2012. The EZ Clear Program will be decommissioned following the transition.
“Moving savings bonds to image-enabled processing provides financial institutions an opportunity to remove the last remaining paper from their back room.”
The Federal Reserve Banks are collaborating with Public Debt to prepare for this transition so your organization can benefit from a more streamlined and cost-effective alternative for redeeming savings bonds.
On January 30, 2012, we communicated (PDF) operational details to customers regarding this initiative. An EZ Clear to Image-enabled Savings Bond Processing Quick Reference Guide, available online in the next several weeks, will outline the major operational changes that could affect your institution, including the handling of redeemed savings bonds in mixed and separately sorted ICLs and mixed paper and facsimile savings bonds.
Visit the Image-enabled Savings Bond Processing Resource Center for additional information. Please bookmark this link for future reference and share this information with others in your organization as well as any image vendors.
"We are excited to partner with the Retail Payments Office to provide financial institutions an opportunity to benefit from the improved efficiencies of image-enabled savings bond processing.”
If you do not currently deposit FedForward ICLs with the Federal Reserve Banks, we encourage you to contact your account executive or Check Services Customer Support at (877) 372-2457 to begin the process of signing up for these services. The FedForward Services Setup page provides step-by-step instructions to guide you through the process to become a FedForward depositor. No action is required for current FedForward ICL depositors.
We will continue to provide details regarding this initiative, including the timetable for the conversion, in future FedFocus issues. To be sure you are on our mailing list for future communications, or to include other staff members at your institution on the distribution list for future communications, please have each individual complete the email notification form.
If you have additional questions, please contact Savings Bonds Customer Support at (800) 553-2663.
Address comments and questions to the Financial Services Webmaster.
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